Summary of a Recent
Judicial Development in
National Organic Program

First Circuit Reviews Inconsistency
Between Organic Program Final Rule
and the Organic Foods Production Act

Joshua T. Crain
National AgLaw Center Graduate Assistant

Summary of Decision

In Arthur Harvey v. Ann Veneman, 396 F.3d 28 (1st Cir. 2005) the United States Court of Appeals for the First Circuit addressed possible conflicts between the National Organic Program Final Rule, 7 C.F.R. Part 205, which became effective on October 21, 2002, and the Organic Foods Production Act (OFPA) of 1990, 7 U.S.C. §§ 6501-6522. See id. Specifically, there were eight claims of inconsistency raised by Arthur Harvey, a producer and handler or organic crops, a USDA-accredited certifier inspector, and a consumer of organic products. See id. The overall question posed by Harvey was whether the OFPA fulfilled its purpose in light of the final rule. See id. The First Circuit explained that the three purposes of the OFPA were to: (1) establish national standards for the marketing of organically produced products, (2) ensure consumers that organically produced products meet a consistent standard, and (3) facilitate the interstate commerce of organic products. See id. The court agreed with Harvey and ruled against the USDA with respect to two counts - the use of synthetic substances in processing, and conversion of dairy herds to organic production. Id. at 38, 43.

Discussion

A. Alleged Exemption for Nonorganic Products Not Commercially Available

Harvey argued that § 205.606 of the final rule allowed the introduction of any nonorganic ingredient into processed products whenever an individual certifier determined that the ingredient was not commercially available in organic form. See id. at 35. Part of the language of § 205.606 provides that "[a]ny nonorganically produced agricultural product may be used in accordance with the restrictions specified in this section and when the product is not commercially available in organic form." Id. Harvey argued that this language violated the Act by not requiring all specific exemptions to the Act's ban on nonorganic substances to be listed on the National List after notice and comment rulemaking. See id. In essence, Harvey argued that an individual certifier could make the decision that a particular product was not available in organic form and thus allow use of the product without first going through notice and comment rulemaking and having the product placed on the National List. See id.

The USDA argued that Harvey's interpretation of § 205.606 was incorrect. See id. USDA argued that the specific language referred to by Harvey did not create a blanket exception, but instead further defined the limitations of any addition to the National List. See id. The court agreed with USDA but remanded back to the district court for a declaratory judgment that this particular section does not establish a blanket exemption to the National List requirements. See id. at 36. The court recognized that Harvey's interpretation, though contrary to OFPA's requirements, was a plausible interpretation of the language and would therefore not simply affirm the district court's ruling without additional clarification on the manner of interpretation. See id.

B. Use of Private Certifiers' Seals on Products Containing Less Than 95% Organic Ingredients

Harvey argued that the OFPA implicitly prohibited the certification of organic ingredients or the use of non-USDA seals on products containing between 70 and 94% organic ingredients because § 6505(a)(1)(B) of the Act forbids labeling that "implies, directly or indirectly, that [a] product is produced and handled using organic methods' when it was not produced or handled in such a way." Id.

The court explained that Harvey's argument relied on two premises: (1) that the Act allows for only USDA certification which cannot be decoupled from private certification, and (2) that the Act does not contemplate certification of ingredients. See id. The court explained, however, that the premises were not supported by the Act. See id. Namely, the court explained that the Act did not mention private certification and, therefore, could not address the coupled or uncoupled nature of private and USDA certification. See id. The court also explained that the Act was silent as to the certification of ingredients as organic. See id.

The court stated that the regulations were reasonable in light of the overall scheme of OFPA. See id. The court explained that the information sought by the rule would allow the Secretary to "identify and track certifiers on a product-by-product basis, create consumer confidence that the specified ingredients are indeed organic, and provide the name of the certifier, which may be useful to some consumers." Id. at 27.

C. Use of Synthetic Substances in Processing

Harvey next argued that two sections of the rule directly contravened the language of the Act that provides that handling operations "shall not, with respect to any agricultural product covered by this title . . . add any synthetic ingredient during the processing or any postharvest handling of this product." Id. at 38. The court agreed with Harvey and rejected USDA's argument that § 6517 of the Act allowed the listing of synthetics for use in the handling of products labeled organic. See id. Further attempts by USDA to argue that § 6517 of the Act was ambiguous, thus allowing the Secretary to "draft a reasonable reconciliation," were rebuffed by the court, which noted that the Act was not ambiguous. Id.

D. Exemption of Wholesalers and Distributors from Certification Requirements

Harvey argued that § 205.101(b)(1) of the final rule that excluded handling operations that sold products pre-packaged that would not undergo any further processing violated the requirements of certification and other OFPA requirements. See id. at 40. However, the court noted that the purpose of § 6510 of the Act was to prevent contamination or exposure to contamination by products. See id. Because of the pre-packaged form of the products in question, and their status of remaining packaged, the court held that the certification requirement for those handlers was irrelevant. See id.

E. Prohibition on Uncompensated Advice from Private Certifiers

Harvey challenged § 205.501(a)(11)(IV) of the rule, which prohibits certifying agents from "giving advice or providing consultancy services, to certification applicants or certified operations, for overcoming identified barriers to certification." Id. at 41. Harvey argued that the rule section expanded the Act's prohibition on such activity for remuneration, being silent concerning such activities where there was no remuneration. See id. Further, Harvey argued that to prohibit such consultation was a violation of the First Amendment to the U.S. Constitution's free speech protections. See id.

The court noted, however, that what the Act sought to avoid were conflicts of interest between certifiers and those that were being certified. See id. The court noted that the situation where a certifier gives advice to an entity being certified that turns out to be erroneous is then in the position to either report the violation to USDA or retract the advice. See id. This, the court explained, was the type of conflict the Act sought to avoid. See id. The court agreed with USDA's interpretation. See id.

F. Conversion of Dairy Herds to Organic Production

Harvey challenged the rule addressing the conversion of dairy cows to organic production. See id. at 43. The Act provides that cows whose milk products will be sold labeled as organic must be raised in accordance with the Act for a period of 12 months prior to the sale of such milk or milk products. See id. The rule, however, allows for less stringent requirements during a conversion from traditional to organic production. See id. Specifically, the rule allows a producer to feed the dairy cattle an 80% organic feed for the first nine months of the conversion process, as opposed to the 100% required under the Act. See id. "The Secretary characterizes the challenged regulation, which provides for a phased conversion process, as an 'exception' to this requirement." Id. The Secretary defended the position by providing that the Act is silent as to dairy conversion and further that the Act does not define the meaning of "handled organically" and thus the Secretary may fill this gap with a reasonable interpretation. Id.

The court disagreed. See id. It noted that the twelve-month requirement of the Act had no meaning if not applied to converting herds. See id. Additionally, the court stated that the term "handled organically" had been dealt with by the Secretary by virtue of the 100% feed requirement. Id. at 13. It therefore held that the final rule allowing a converting herd to be fed a diet of only 80% organic feed for a period of 9 months was in conflict with the Act. See id.

G. Prohibition on Distinct Private Certification Standards

Harvey challenged § 205.501(b)(2) of the final rule that, which prohibits "a certifying agent from requiring compliance with any . . . practices other than those provided for in the Act and the regulations . . . as a condition of use of the agent's identifying mark." Id. at 44. Harvey argued that this would "suppress competition among users of organic production and handling methods, create consumer confusion, and limit consumer choice." Id. He also argued First Amendment implications for the first time and the court refused to address the argument. See id.

The court held that § 205.501(b)(2) of the final rule did not frustrate the purpose of the Act, as Harvey alleged, but that it furthered the purpose of the Act. See id. at 45. The court explained that the goal of a national standard was furthered by requiring consistency. See id. Further, because the Act did not speak to the issue of more stringent private standards or certification requirements, the court, under Chevron U.S.A., Inc., v. Natural Resources Defense Council, Inc. 467 U.S. 867 (1984), considered the Secretary's interpretations reasonable. See id.

The case was decided on January 26, 2005; this summary was posted Mar. 21, 2005.